There may be some excitement in the response to the Central Statistical Organisations advance growth figures for this fiscal year. 7.1 per cent,we might say,is not that bad,even if India has been growing at 9-ish per cent for a few years now. Indeed,the deputy chairman of the Planning Commission almost came out and said as much: with a bit of fiscal stimulus next year to match that delivered this year,he said,India will not be slowing as much as the rest of the world. That may or may not eventually happen,and analysts will probably wish to wait for the final figures before making any definitive pronouncements; though most official forecasters have been converging on similar figures,with both the prime ministers economic advisory council and the Reserve Bank of India coming to similar conclusions about growth. Yet there isnt room for complacency.

True,the figures contain some interesting surprises. Agriculture has remained firm,for example  it is easy to forget that a few months into the last fiscal year,there was considerable concern about misapplied price policy in agriculture,and about mistaken responses to what looked like a major food crisis. Also,the figures suggest that investment does not appear to have collapsed. What is needed is to ensure that that trend is allowed,indeed encouraged,to continue.

The job figures released earlier,and the index of industrial production expected in the coming week,will likely tell similar stories: small industry,the major driver of Indian growth,especially employment growth,is still credit-starved. Policy needs to keep this in mind. As these columns have pointed out previously and consistently,shock measures are necessary in India: given the long lag times and enormous loss that have been built in  or,in the case of the monetary system,been allowed to persist. A policy of gradualism will not work as its proponents claim. It will not create macroeconomic effects soon enough to postpone a catastrophic slowdown,and its advantages are equally dubious.